Government urged to scrap stamp duty for additional properties
By scrapping the stamp duty levy on additional properties, nearly 900,000 new private rented homes could be made available over the next decade, according to the National Residential Landlords Association (NRLA), citing Capital Economics data. It added that this could lead to a £10bn boost to Treasury revenue.
The trade association explained that since 2015, the government has been making a “deliberate effort” to cut investment into rental housing, by taxing the supply of new homes to rent with a 3% stamp duty levy.
It added that the government has limited mortgage interest relief to basic rate of income tax, so landlords are taxed on turnover as opposed to profit.
The trade association said this was “fueling a supply crisis” as 62% of landlords surveyed reported heightened demand in Q1 this year, which it said was a record high.
Around 11% of landlords sold property, which compares to 8% of those who bought property.
It added that private rents had risen by 2.4% in Q1 this year, which is the largest annual growth since 2016.
Ben Beadle, chief executive of the NRLA, said: “Ministers have been repeatedly warned of the damage that would be caused if they continued to attack the private rented sector.
“The supply crisis is completely counterproductive to the government’s mission to turn renters into homeowners. By suppressing supply whilst demand increases, with rents going up as a result, they continue to make it harder for tenants to save for a home of their own.”
He added: “The chancellor needs to wake up to a crisis of the government’s own making, scrap the tax on new homes to rent and review other measures which add to a landlord’s costs.”